The East Bethel City Council Sept. 5 adopted a preliminary 2013 general fund budget and tax levies.
The general fund pays for most of the day-to-day city operations such as police and fire protection, maintaining roads and parks, inspections and paying people to take care of all of this. For the time being, the general fund budget is expected to increase by .32 percent from $4,795,898 in 2012 to $4,811,223 in 2013.
Property taxes typically fund a vast majority of general fund expenditures. The general fund levy of $4,230,407 in 2013 would constitute 87.9 percent of the general fund’s revenue.
The general fund levy is not the only tax levy in East Bethel, however. The 2013 levies include $149,638 to pay for construction of a fire station and installation of weather warning sirens in 2005, $180,000 for the city’s purchase of the Castle Towers wastewater treatment facility in 2008 and $144,670 for Economic Development Authority (EDA) activities.
The total 2013 levy for now, including the four different levies, is $4,704,715. The total 2012 levy was $4,660,226.
Mayor Richard Lawrence said he was “extremely disappointed” in the council for approving a budget that increases the levy. He feels the council and staff did not do a good enough job in seeing if there were parts of the budget that could be reduced.
“I know we could have done better, but we didn’t,” Lawrence said.
Budget discussions can continue, however. Anoka County cities must let the county know by mid-September what the preliminary tax levies are estimated to be for the following year. With this information in hand, the county estimates 2013 property tax amounts for each property once it hears from the county board, the local school board and other governing bodies like watershed management organizations.
The council could lower its levies in December or keep them the same, but cannot increase it.
There will be a public hearing on the proposed budget and tax levies for 2013 during the Dec. 5 council meeting.
There are very few major changes to the budget between 2012 and 2013. The streets maintenance budget is seeing a 3 percent bump. The 2012 streets maintenance budget was $732,587. The 2013 amount is projected to be $752,408.
This budget does include a 1.5 percent salary increase for all city employees. According to Finance Director Rita Pierce, this adds about $23,250 to the 2013 budget.
This would be the second “cost of living” increase city employees have seen in the last four years, according to City Administrator Jack Davis. There were no salary increases in 2010 and 2012 and a 1.5 percent increase in 2011.
Another addition to the budget is $4,000 for new computers for the mayor and four councilmembers, which amounts to $800 each. The council is interested in following a path other cities have taken to print far less paper and instead receive electronic council packets.
Davis estimated the city would save $10,000 over the next four years not only in material costs, but labor costs as well.
Each elected official would be able to purchase a laptop, iPad or whatever mobile computer device they are comfortable with and purchase software that would be needed to view these packets and other supporting documents. They would be reimbursed based on what they actually spend, up to an $800 limit.
For the time being, the city is projected to have a negative cash balance of $91,376 at the end of 2013 in its debt service payment fund for the sewer and water project.
In addition, the city may owe the Metropolitan Council payments if it cannot get enough people hooked up to the system. The Metropolitan Council also made significant investments in this project and has its own debt to repay. The city’s current projection is it may owe the Metropolitan Council a penalty of approximately $110,000.
Councilmember Heidi Moegerle made a motion that the council vote to increase the preliminary 2013 levy by an additional $200,000 to cover these potential costs. Councilmember Robert DeRoche Jr. agreed with Moegerle, who said the council could lower the levy in December if talks with the Metropolitan Council to delay or reduce penalty payments are successful.
Lawrence and Councilmember Steve Voss voted against the motion to increase the preliminary levy by $200,000, so Moegerle’s motion did not pass because of the split vote.
“Whether I’m on the council in two years or not doesn’t matter,” DeRoche said. “The next council is going to have to deal with this, and I’ll face the music now and say I’m not going to shove it off on someone else because I don’t want to deal with it.”
DeRoche said he was not on the 2010 council that made the decision to move forward with the sewer and water project, but they now have to clean up the mess.
Voss said that previous projections showed there would be a deficit for the first couple of years and the city does have adequate budget reserves to cover the shortfall.
“You’re not projecting. You’re guessing at where the world will be in two years,” Voss said.
Moegerle and DeRoche were concerned about using budget reserves to cover any 2013 shortfall and not having some of that money in 2015 when the deficit is projected to be much greater if enough businesses are not hooking up.
“I’m not in a hurry to tax people, but I think at this position today we have to protect ourselves…,” Moegerle said.
Eric Hagen is at [email protected]